About Me-email is... grant.go@aol.com

Friday, December 6, 2013

British Columbia`s LNG Nightmare, The Devil Is In The Details

I receive daily LNG stories and analysis from around the world...

Here is a little something..

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Several LNG projects are currently under development in British
Columbia, a western province of Canada. Canada is one of Japan’s most
important partner countries in terms of advancing diversification of
energy supply sources in order to secure a competitive and stable supply
of LNG.To import LNG from Canada, some issues, including the
development of infrastructure, such as LNG terminals and pipelines,
expeditious processing of permits and licensing, and LNG tax needs to be
solved.

Policy dialogues with British Columbia are extremely
important for Japan to solve such issues. In light of such recognition,
Minister Motegi met with Premier Clark to exchange views on specific
measures for LNG supply from Canada to Japan at competitive prices. At
the same time, both sides signed a Memorandum on Energy Cooperation and
Development between The Ministry of Economy, Trade and Industry, Japan
(“METI”) and The Government of the Province of British Columbia, Canada
(“BC”), which mentions the establishment of an annual high-level
meeting. In response to the memorandum, on December 3, 2013, METI
will hold the first high-level meeting with British Columbia and discuss
policies in detail.

Granted there is very little detail in the above link, however, the dunce, Christy Clark and her minister of hot air, lies and blather Rich Coleman has told our domestic head firmly planted in the sand media that BC`s most competitive LNG tax in world was good to go.."We have found a sweet spot"...."Industry is mostly in agreement that we are on the right track"..

Those are very scary words from Rich Coleman..

Another article arrived in my in box...here is the preamble...

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Japanese Minister Motegi says issues with Canada like LNG tax have to be resolved

"The powerful Japanese Ministry of the Economy, Trade and Industry
said several issues have to be resolved with Canada before the start of
LNG exports to Japan"

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The problem is as I see them...Western Australia, a country that has been exporting natural gas for decades, a country who has seen $10s of billion in LNG infrastructure built, ...is now a country on the road to massive new debt loads..Western Australia`s current debt is about $22 billion dollars, that number is set to rise to $28 billion dollars next year, ...

Western Australia has just had their credit rating downgraded...And more, much much more..

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WA Budget: Premier Colin Barnett says state government has 'no choice' but to raise taxes

WA Government denies broken promises in budget

The WA Government concedes the state has a 'problem
with debt', in handing down its first budget since the state election in
March.

The Barnett Government expects to post a surplus of $386
million over the 2013/14 financial year, with debt predicted to rise to
$22 billion. By the 2016/17 financial year, debt is expected to blow-out
to $28.4 billion.

The Government has confirmed it will break two of its big-ticket
election promises by not delivering its MAX light rail and airport rail
link in time by its self-imposed 2018 deadline. Instead, it has now given both projects an 'anticipated completion' in 2019.

As part of the Government's so-called Fiscal Action Plan, there will
be a 12.5 per cent across-the board increase in land tax rates from
2013/14. This is expected to raise a total of $338 million over the four
years to 2016/17.

The plan also includes the introduction of an
ongoing program evaluation in the public sector, with targeted savings
of $350 million over the next four years.

Private motor vehicle registration fees will also jump a further $36 a
year from January next year, after Mr Buswell revealed the Government
will halve the $72 concession it currently provides. This is expected to
raise an estimated $155 million over the forward years.

In a bid to save money, the Government will also target the popular
solar feed-in tariff scheme, with Mr Buswell describing the current 40
cent per kilowatt customer payment rate as "overly generous". From 1 October, the rate will drop to 30 cents and by 1 July next year it will reduce to 20 cents.

Mr Buswell also confirmed there will be changes to the State's first homebuyers' grant scheme. Currently
the Government provides $7,000 for purchases of both new and
established properties. Under the changes, the grant for established
homes will drop to $3000..._____________
Western Australia credit rating downgraded..
___________

We need to see and learn the lesson of this Dutch Diseased petro state, ...

Back in 2008 a "Royalties for Regions" program was created...25% of the state`s mining and petroleum royalties would be set aside for the rural areas, ...

One might consider Christy Clark and the BC Liberals proposed "prosperity Fund" with promises of hundreds of $billions of dollars for future generations, all that money to come from LNG revenue..

Well eat my shorts...Western Australian Government is reneging on its commitment to the fund and is actually raiding the fund to try and get a handle on its ballooning debt..

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WA’s Royalties for Regions in the firing line

The fund was for regional spending above and beyond traditional
government expenditure. Royalties for Regions is now enshrined in
legislation.

But Mr Grylls, who is Regional Development Minister, said
on Wednesday:

“You will see changes to the [Royalties for Regions]
program in our budget that recognises that the debt levels are pushing
to a level we are concerned about.”

Mr Barnett told ABC Radio that Thursday’s state budget would be a
“responsible budget fitting the times” and hinted there could be further
increases in charges, after utility charges, motor vehicle fees and
public transport fares had already risen.

Since its inception Royalties for Regions has paid for everything
from a $250,000 talking-musical public toilet to a $1 billion promise to
convert Karratha and Port Hedland into advanced regional cities. Last
financial year $1.2 billion was allocated to Royalties for Regions, with
a further $4.7 billion expected in the coming four years.

But the program is yet to spend its 25 per cent royalty allocation
entirely because it has succumbed to an “efficiency dividend” since
2009, hiving off a portion of expenditure.

The government may look to use Royalty for Regions funds, or funding
previously quarantined under the “efficiency dividend”, to finance
agricultural election promises.

The Nationals promised $300 million over five years to improve
infrastructure, and for research and development and marketing. The
Liberal government committed more modest expenditure, including $20
million for a biosecurity fund and a similar R&D fund.

____________

So not only is the Western Australia Government despite massive LNG investment and record natural gas exports are drowning in debt, they are assaulting and scooping back royalties that were promised to rural areas as an appeasement for fracking and major industry, Western Australia has had their credit rating downgraded...Taxes have been raised on home-owners, car insurance, grants taken away, taxes taxes and more taxes and now the Government is dipping into the once shielded royalty monies promised to rural areas..

Western Australian recently elected Government has also reneged on almost every election promise made...Check out this shocking list of WA Government`s broken election promises..

Christy Clark, Rich Coleman are promising the lowest LNG tax in the world, and for industry it is not low enough, Japan just days after meeting with the BC Liberal/industry world traveling circus have come out swinging stating...

"BC`s taxation scheme has yet to be resolved to Japan`s satisfaction"

British Columbia is already drowning in debt,..

CONOC(China Government)..JAPEX(Japanese Government)...PETRONAS(Malaysian Government)....SINOPEC(China Government)...KOGAS(Korea Government) are the only companies building(planning on building) LNG facilities...Private for profit LNG companies are running for the hills, as why would they build anything in British Columbia when those countries are the customers of the gas..

China, Japan, Korea and Malaysia are proposing producing BC LNG for domestic consumption, from well-head to pipeline to LNG liquefication plant to transport back to the homeland...And they all want this gas for cost, ...

The so-called Asian premium is history, countries that own the entire production chain will not pay a premium, why would they, why would these Asian countries invest $billions and $billions of their own dollars only to be forced to pay an Asian premium, ..They wouldn`t they could save their money and buy from Western Australia, East Africa, Qatar, Russia, there are LNG facilities coming online around the world, projects built and completed with dozens more LNG plants near completion..

We missed the LNG boat, Asian countries want their own piece of British Columbia..our water, our airshed, our environment and no taxation, ...

Christy Clark, Rich Coleman and all BC Liberals pre-election blathered about receiving 4 and 5 times the North American natural gas price in Asia...That fantasy and thought has now been put to bed, now the BC Liberal Government is negotiating for pennies, not dollars but pennies..

Offshoe Korean built in modular form facilities(merely assembled in BC,... 2000 construction employees at peak construction), ......British Columbia LNG plants(if built) will be filled with Asian employees...And now the largesse revenue has been negotiated down to pennies, and even at that price Asia is balking, as they see a BC Liberal Government sweating bullets...Sweating bullets and begging for investment, all in the name of keeping the LNG $trillion dollar fantasy alive..that fantasy was dead 2 years ago, dead yesterday and remaining dead forever..

and by the way, British Columbia lost 8000 more jobs in November, and November is a so-called hiring month...Christy Clark`s jobs plan..?..Hiring friends?

And if that wasn`t bad enough, British Columbia loses 8000 jobs and construction firm has hired illegal workers for a cheap cut-rate...What, we don`t have young male workers for construction labouring jobs?...And no, I don`t blame these undocumented workers..

9 comments:

Only one comment? I'm not surprised - only speechless.Hasn't anyone told Chrispy about methane hydrates, artificial photosynthesis, the Chinese Sun, thorium reactors etc, etc? LNG, with a payback period of 30 years is so...outdated.I could go on, but you already have the message. No point in me repeating it. Just needed to vent, I guess.John's Aghast (and ALMOST speechless)

I was informed through Twitter that my last LNG article has been placed/linked at a Website ...

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Hi Grant,thought you might be interested in this discussion going on at Naked Capitalism on the perils of fracking. (And the industry shills are being taken to task).http://www.nakedcapitalism.com/2013/12/ohios-official-fracking-water-damage-denialism.html